5806: Underpayment of Estimated Tax by Corporations (2024)
California · FTB · Used for tax years 2024
California Form 5806 is used by corporations to figure underpayments of estimated tax and any resulting penalty for 2024. It records installment amounts due, payments and credits, and includes worksheets to determine whether an exception to the penalty applies.
Who files this form
Form FTB 5806 is for corporations figuring an underpayment of estimated tax for taxable year 2024.
The form gives these attachment rules:
- If Exception B or C is met for any installment, attach Form FTB 5806 to the back of Form 100, Form 100W, Form 100S, or Form 109.
- If Exception A for regular corporations, line 8a, is met for all four installments, do not attach Form FTB 5806 to the return.
What you'll need
Have the following information ready to complete the form:
- Corporation name, California corporation number, and taxable-year beginning and ending dates.
- Current-year tax and the amounts paid or credited for each estimated-tax installment.
- Payment dates and any overpayment from a previous installment.
Depending on the exception you use, you may also need:
- Exception A: Prior-year tax from a return covering a full 12 months.
- Exception B: Taxable income for each annualization period, tax credits, and other taxes.
- Exception C: Taxable income for the specified periods in taxable years beginning in 2021, 2022, 2023, and 2024, plus tax credits and other taxes.
S corporations using Exception B or C also need the applicable R&TC Section 23802(e) deduction.
How to file
If Exception B or C is met for any installment, attach Form FTB 5806 to the back of Form 100, Form 100W, Form 100S, or Form 109. Do not attach it if Exception A on line 8a is met for all four installments.
Enter the total estimated penalty from line 22b on the applicable return:
- Form 100, line 43a.
- Form 100W, line 40a.
- Form 100S, line 44a.
- Form 109, line 27.
The supplied form does not provide a mailing address or e-filing directions.
Common mistakes
- Skipping the exceptions worksheets. If line 7 shows an underpayment for any installment, the form directs you to Part IV before figuring the penalty.
- Using an ineligible prior-year return for Exception A. The prior-year return must cover a full 12 months.
- Overlooking the special limits for large corporations. Use their Exception A worksheet only if prior-year tax is less than current-year tax. The exception applies only if line 29 is greater than line 28 for both the first and second installments.
- Completing fiscal-year-only lines as a calendar-year corporation. Lines 16 and 17 are for fiscal-year corporations only.
Questions people ask
Does an underpayment on line 7 always mean a penalty applies?
No. Part IV says the Franchise Tax Board will not assess a penalty if timely payments equal or exceed the amount determined under any of the three exceptions for the same installment period.
What are the three exceptions?
Exception A uses prior-year tax, with separate worksheets for regular and large corporations. Exception B uses tax on annualized current-year income. Exception C uses tax on annualized seasonal income.
When do I complete the penalty calculation?
Complete Part III, lines 11 through 22, for an installment if line 7 shows an underpayment and none of the three exceptions is met.
How do I calculate the total estimated penalty?
Add lines 18 through 22 for each column and enter those amounts on line 22a. Then add line 22a, columns (a) through (d), and enter the total on line 22b.